The US Attorney of the Southern District of New York announced that a high-ranking employee at the offshore crypto derivatives exchange BitMEX had entered a plea of guilty to violating a federal anti-money laundering law on August 8. The Bank Secrecy Act was broken by Gregory Dwyer, the former head of business development at BitMEX, who admitted to “failing to establish, implement, and maintain an anti-money laundering programme” at BitMEX.
Dwyer, a 39-year-old dual citizen of Bermuda and Australia, was one of the company’s first workers. Since 2015, he has served as a senior executive, directed the exchange’s Manhattan office, and served as its head of business development. But in 2019, Dwyer relocated to the exchange’s office in Bermuda.
The Bank Secrecy Act carries a five-year prison sentence as its maximum punishment. Dwyer nevertheless has to pay a separate $150,000 criminal fine “representing pecuniary gain derived from the offence,” per the terms of his plea agreement.
According to the report:
“Dwyer aided and abetted BitMEX’s failure to institute AML or KYC programmes despite closely following U.S. regulatory developments that made clear the legal obligation to do so if BitMEX operated in the United States, which it did.”
According to The Royal Gazette, a local newspaper from Bermuda, Dwyer consented to be extradited from Bermuda to the US in September 2020.
The co-founders of BitMEX, Arthur Hayes, Benjamin Delo, and Samuel Reed, were also charged with a crime after the U.S. Attorney alleged that BitMEX was a hub for money laundering because it lacked know-your-customer (KYC) requirements and lax anti-money laundering laws.
Delo and Hayes were ordered to pay $10 million each, and the latter was also given a sentence of two years of probation and six months of home detention. Delo received a 30-month probationary term without house arrest.